Editor’s Note: This story is part of a new series on the convergence of art and luxury. See all of our reporting on the topic here.
LVMH’s uneasy quarter has sent another tremor through the luxury world, reinforcing how fragile any talk of recovery remains for an industry still grappling with geopolitical strain, cautious consumers, and compressed margins.
Shares in the French conglomerate fell roughly 7 percent on Wednesday after the release of its fourth-quarter results, as investors reacted to weaker-than-expected margins and a notably restrained outlook from its top brass. The decline rippled across the sector, pulling down shares in Gucci owner Kering, Moncler, and Hermès by between 2 and 5 percent. It’s a reminder of LVMH’s status as a bellwether for global luxury, fashion, and the broader cultural economy the group helps shape.
For the quarter, LVMH reported a 1 percent increase in organic sales to €22.7 billion, extending modest momentum from the previous period. But the numbers failed to meet heightened expectations, particularly after more optimistic recent commentary on China from rivals including Richemont and Burberry. While LVMH said sales in China did grow during the quarter, analysts described the rebound as underwhelming, especially given hopes that renewed demand in the region might lead a broader turnaround.
At a press conference following the results, chairman and chief executive Bernard Arnault struck a cautious tone. Geopolitical crises, economic uncertainty, and volatile government policies, he said, made it difficult to forecast the year ahead with confidence. Arnault also confirmed the group would continue to tightly manage costs in 2025, signaling that preservation, rather than expansion, remains the immediate priority.
Pressure was most evident in LVMH’s fashion and leather goods division—home to Louis Vuitton and Dior, and the engine of more than half the group’s profits—where operating profit fell 13 percent. Sales of fashion and handbags declined 3 percent in the fourth quarter, disappointing analysts who had hoped the category would lead the recovery. A combination of US tariffs, a weak dollar, and slowing demand has weighed on margins across the group, complicating efforts to reignite growth without further price increases.
Other divisions painted a mixed picture. Watches and jewelry, including Tiffany & Co., stood out as a rare bright spot, with organic sales rising 8 percent in the quarter. But the wine and spirits business—though a relatively small contributor to overall revenue—raised fresh concerns after operating income fell sharply, hit by declining cognac sales in both China and the United States.
Chief financial officer Cécile Cabanis acknowledged that further sales growth would be necessary for margins to recover, emphasizing a dual focus on reviving demand while maintaining discipline on costs. “We need growth,” she said, “and we are going to focus on getting growth going again, and continuing to manage our costs.”
It remains to be seen how LVHM’s tanking shares impact the auction houses’ increasing lean into the luxury market. Sotheby’s consolidated luxury sales topped $2 billion in 2024, roughly a third of the house’s $6 billiomn total that year. That result is triple its 2019 luxury total and remains the highest such figure in the industry. As for Christie’s, it took $468 million from handbags, jewelry, and watches in 2024, or about 22 percent of the house’s $2.1 billion total. That figure is a 6 percent rise on the year before.
